Innovation Myth #3: Avoid the Competitive Crowd, Look for “Blue Ocean” Markets
Inc. Magazine interviewed me for an article where I touched on seven “innovation myths” that can lead your innovation efforts astray. Here, I am expanding on myth #3: Avoid the competitive crowd and look for “blue ocean” markets.
Many business leaders, on the trail of seeking the next business promised land, surf the latest best sellers, attend academic conferences and follow the thought leaders as they continue to whipsaw their organizations into the fad du jour, rather than looking within and improving the company’s approach and processes for innovation.
If you are not familiar with the term, a “blue ocean” market refers to creating a new market for your product versus competing in an existing crowded market. My goal is to show you that you don’t need blue oceans, new ideas or eureka moments. You can be successful in an already crowded market by changing your purpose in that market.
Some markets are more challenging than others for sure. But there's an abundance of examples where companies in highly competitive markets dominate by innovating on dimensions that have nothing to do with their core products. No matter how crowded the space is, a disciplined innovation process decides the winners.
Learn from Thomas A. Edison, the greatest innovator of all time. Contrary to popular belief, Edison didn’t invent the light bulb. In fact, there were over 20 light bulb inventors dating back to 1802 with many in the market when Edison entered.
In 1878 Edison figured out a consumer gap. What consumers wanted was light at a reasonable price. He translated that desire into a process for developing a durable incandescent material, eliminating air from the bulb through vacuum, and discovering a filament material of high resistance.
He and his team experimented from his invention factory in Menlo Park through a superior innovation process that integrated field trips and lab work. In 1879 the Edison team achieved 13.5-hour light duration and filed a carbonized filament patent. That same year, they discovered that carbonized bamboo filament would last 1,200 hours. With this foundation, they began production in 1880 with a product that filled the gap, causing Edison to be perceived as the founder of the light bulb.
A modern day example from my interview with Inc.: “Think about Apple. When they entered the digital audio business in November 2001, there were over 50 companies selling MP3 players in the US. The last thing the world needed was another MP3 player. Or, was it? Apple’s software vertically integrated the music store, selection, and player. From a core product perspective, Apple solved the piracy, size and storage challenges, but this is not what catapulted Apple sales to the #1 “MP3” product.
More than anyone else in the market, Apple understood value from the user experience perspective, perceived the gaps in service, and saw the technological trends that could close those gaps.” It launched a consumer-focused marketing campaign “1,000 songs in your pocket.” It cracked the code but Apple had to take their process one step farther. Sales were modest until 2004. By expanding outlets to free up access and use cases such as integration with BMW, sales crossed the 10 million mark.
From these two examples, there are three significant takeaways:
- Apple had a higher order aspirational purpose than its competition in that they strove to deliver a consumer experience, not a product. Edison’s purpose was aspirational too, affordable electric light for everyone.
- Both had an ability to understand the deficiency gaps in the market and take advantage of them. They didn’t shy away from a competitive marketplace.
- Apple and Edison had superior experimentation processes, not ideation or project mentalities, but the ability to drive dynamic experimentation as a systematic discipline.
The great innovators and innovation companies then and now understand that innovation success is more impacted by a scientific experimentation process than by creativity. There are plenty of opportunities in crowded markets for a company with laser focus on “futuristic customer value” and focused on creating an innovation experimentation machine. In the words of Thomas Edison, “I have not failed 1,000 times. I have successfully discovered 1,000 ways not to make a light bulb.”
Stop looking for blue oceans and learn to drive innovation as a systematic discipline for sustainable growth.
Have you launched a successful product or service in a crowded market? Please share in the comment section below.
If you enjoyed this post be sure to read innovation Myth #1 "You Can't Innovate Without Good Ideas" and Myth #2 "Fail Fast, Fail Often is the Secret to Innovation."